State Bank initiative to boost remittances from overseas Pakistanis

The State Bank has offered marketing expenses reimbursement to overseas entities that succeed to mobilize large amount of remittances for the country.

The State Bank announced the scheme as part of Pakistan Remittance Initiative (PRI) which was launched a couple of months ago to accelerate pace of remittances from overseas Pakistanis.

The State Bank said it will pay marketing expenses as percentage of remittances mobilized by an overseas entity.

According to details, if an entity mobilises remittances above $100 to $400 million from one particular jurisdiction, the marketing expenses would be paid on incremental amount (above $100 million) as 0.5 per cent of remittances.

Similarly, if an entity mobilises $400 to $800 million, the expenses would be paid on incremental amount (above $100 million) as 0.75 per cent of remittances and one per cent would be paid if an entity mobilises $800 to $1200 million.

If an entity mobilises above $1200 million, one per cent of total amount of remittances would be paid.

The SBP said a performance based scheme has been developed to encourage overseas entities to enhance marketing efforts at origination end.

According to a circular issued by the State Bank on Monday, the government will reimburse marketing expenses through SBP.

This scheme will be applicable to those entities who offer free remittance services under scheme of reimbursement of TT charges and the incentives would be given on country-wise performance of the overseas entities.

Under the scheme, overseas entities would be required to submit a detailed marketing plan to respective banks with which they have home remittance related arrangements.

This scheme would be applicable to those overseas entities which have arrangements with banks in Pakistan only and if any overseas entity itself or any of its affiliated concern is found involved in effecting remittances through channels other than banking sector in Pakistan, such an entity would not be entitled to reimbursement under the scheme, said the SBP.

According to the circular, the entities already effecting remittances through banking channels, their target would be 25 per cent more than what they channeled during the period from Oct 1, 2008 to Sept 30, to qualify for the above scheme (for the entities which started operations during the above-referred period, their respective targets would be calculated by spreading their existing performance to the whole 12 months.

Similarly, only those entities would be eligible for reimbursement under the scheme which has satisfactory compliance status.

This scheme would be for one year initially and overseas entities would be reimbursed at the end of the scheme year based on actual performance as assessed by SBP while the starting date for evaluating the performance would be October 1, and their performance would be evaluated on the amounts mobilised till Sept 30, 2010.

The performance of overseas entities in terms of home remittances affected would be reported by banks to (PRI) SBP on monthly basis, the circular said and added the scheme would run concurrently with any other scheme previously announced by SBP and currently in force.

The State Bank observed that one of the major impediments to the flow of remittances through formal channels was insufficient marketing efforts at the originator end, aimed at providing information about remittance channels and other facilitation to overseas Pakistanis.Dawn

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